Flying to Israel on Wednesday from a two-day visit to Egypt, Putin travelled to holy sites in Jerusalem, where he is scheduled to meet Israeli President Moshe Katsav and Prime Minister Ariel Sharon on Thursday.
On Friday, Putin was due to hold talks with Palestinian President Mahmud Abbas in the West Bank city of Ram Allah - another historic first for a Russian head of state - before returning to Moscow.
The president hopes his tour of the Middle East will reinvigorate Moscow's clout in the region, which has been diminishing steadily since the collapse of the Soviet Union.
The highlight of Putin's visit to Egypt - a proposal to host a Middle East peace conference this autumn - prompted a cool reaction in Israel and the United States.
Putin (L) met Mubarak in Cairo
The Palestinians were enthusiastic. Such a conference would help "rapid implementation of the roadmap", Deputy Prime Minister Nabil Shaath said.
Speaking after talks in Cairo with his Egyptian counterpart Husni Mubarak, Putin said the conference would help advance the so-called road map peace plan, which aims to create a Palestinian state and ensure Israeli security.
Russia, along with the US, the European Union and the UN, is one of the sponsors of the largely stalled, two-year-old roadmap.
Israeli Foreign Ministry spokesman Mark Regev said that an international conference could take place as part of the roadmap, but added: "We are not even in the road map at the moment."
There were similar doubts in Washington, which is Israel's main ally.
"We believe there will be an appropriate time for an international conference, but we are not at that stage now, and I don't expect that we will be there by the fall (autumn)," White House spokesman Scott McClellan said.
The proposal for a Middle East peace conference, Israeli concern over Russian nuclear cooperation with Iran, and bitter opposition to Moscow's planned sale of anti-aircraft weapons to Syria were expected to top Putin's agenda.
"It is a realistic policy.
It is no longer about fighting for ideological dominance"
Near East Institute,
Despite the potential for diplomatic storms during Putin's trip, Russian analysts believe the Kremlin is trying to demonstrate goodwill.
The days when Soviet support for Arab governments counteracted US backing for Israel are gone and today a weakened Russia has to attempt a more pragmatic, even-handed approach.
"It is a realistic policy. It is no longer about fighting for ideological dominance," Evgeny Satanovski, director of the Near East Institute in Moscow, wrote in the Vremya Novostei daily.